Creditors of Daewoo Electronics Co. said Friday that they chose a consortium led by VideoCon Industries Co. of India as the preferred bidder for their controlling stake in South Korea's No. 3 electronics manufacturer.
Daewoo Electronics is a former unit of Daewoo Group, a local conglomerate which collapsed in 1999 under debts totaling US$80 billion.
The consortium consisting of VideoCon, an Indian consumer electronics manufacturer, and Ripplewood Holdings LLC, reportedly offered $700 million for a 97.5 percent stake held by creditors that include Woori Bank and Korea Asset Management Corp., a state-run restructuring agency. The consortium is 50.1 percent owned by VideoCon, with the remainder held by the U.S. private equity fund. Established in 1979, VideoCon is India's largest consumer electronics maker.
Sources said that it has been intensifying its overseas expansion efforts in recent years.
"Based on bidding documents submitted on Aug. 17, we took into consideration proposed prices and the capability of individual companies to fundraise," a credit bank official said.
South Korean private equity firm MBK Partners was named a reserve bidder for the acquisition.
The creditors originally planned to complete the sale of Daewoo Electronics by mid-October after choosing the preferred bidder by the end of August. Five companies offered preliminary bids.
According to sources, Neo Equity, a Malaysian fund company, submitted the highest price but failed to gain creditors's trust regarding its ability of fund-raising and the real reason it wanted to buy the stake.
The creditors and VideoCon will sign a memorandum of understanding on the deal two weeks later, before the Indian company launches due-diligence for a two-month period.
Daewoo Electronics lags behind Samsung Electronics Co. and LG Electronics Inc. Last year, it posted a net profit of 93.9 billion won ($98.2 million) on sales of 2.15 trillion won.
Daewoo produces a wide range of consumer electronics goods including TVs, air-conditioners, and laundry machines.
Seoul, Sept. 8 (Yonhap News)
VideoCon-led consortium named prime bidder for Daewoo Electronics |
